Question 91

A contract is terminated if it is impossible for one of the parties to perform.

A contract is terminated when one of the parties is unable to fulfill their obligations, making it impossible to continue with the agreement.

A) one of the parties decides not to go forward.

This option is incorrect because a unilateral decision by one party to not proceed does not automatically terminate the contract. Termination typically requires a valid legal reason or mutual agreement, rather than simply a party's choice.

B) a third party intervenes.

This choice is also incorrect. While third-party intervention can affect the execution of a contract, it does not inherently result in termination unless specific terms in the contract allow for it or if the intervention leads to an impossibility of performance.

C) it is impossible for one of the parties to perform.

This option is correct as it directly addresses a fundamental principle of contract law. If a party is unable to perform their obligations due to circumstances beyond their control, the contract is deemed terminated because the foundational requirement of performance cannot be met.

D) one party assigns the rights to another.

This option is incorrect because the assignment of rights typically does not terminate a contract; rather, it allows for the transfer of obligations and benefits to another party. Unless the contract expressly prohibits assignment, the original contract remains in effect.

Conclusion

The correct answer, C, is definitive because it aligns with the established legal principle that a contract can only be terminated when one party cannot fulfill their obligations. All other options either misinterpret the conditions for termination or outline scenarios that do not fundamentally disrupt the contractual relationship.